IndoStar Capital Finance Limited
8,487words
6turns
0analyst exchanges
0executives
Key numbers — 40 extracted
rs,
17%
8%
36%
1.5x
63%
44%
20%
24%
12%
28%
rs
79.0
Guidance — 1 items
Direct Sourcing
opening
“The performance has been strong, with full redemption of senior SRs and commencement of junior SR redemptions from Q4 FY26.”
Risks & concerns — 15 flagged
✓ Prioritized collection effort ✓ Focus on high-risk accounts ✓ Improved intervention timing Analytics-led risk prioritization replacing uniform treatment strategies Bureau Intelligence & Early Warning Always-on Customer Risk Monitoring o Daily Bureau Trigger ingestion o On-us and Off-us payment monitoring o New external loan & liquid loan detection o Address & phone updates for skip tracing
— Business Value
Operational Risk Addressed through defined processes, audits, and staff training Regulatory & Compliance Risk Mitigated via internal audits, compliance testing and monitoring, IT-led controls, and a proactive policy and training environment Liquidity Risk Controlled by active ALM practices and maintaining liquidity contingency buffers Credit Risk Managed through rigorous underwriting, portfolio monitoring, and ECL provisioning Fraud & Cybersecurity Risk Tackled through a Risk Control Unit.
— Expected Outcome
49 Risk Governance and Control Mechanism Interest Rate Risk Regulatory Risk • Assesses key factors including customer profiles, competitive landscape, and growth objectives when making interest rate adjustments • Actively monitors fluctuations in interest rates • Takes appropriate actions to protect the company's business interests • Ensures strict compliance with applicable regulations through a robust internal control system.
— Expected Outcome
Asset Liability Management (ALM) Risk • In line with the Company’s Risk Management Framework, ALCO monitors risk and implements strategies related to asset and liability management.
— Expected Outcome
Credit Risk Operational & Fraud Risk Implements a strong control to effectively identify and manage operational risks.
— Expected Outcome
• The Risk Control Unit (RCU) leads efforts to monitor, investigate, and prevent fraudulent activities.
— Expected Outcome
• Fraud Risk Management reports directly to the Chief Risk Officer.
— Expected Outcome
• Follows a comprehensive credit policy with strict approval processes to reduce risk • • Tracks portfolio trends and early warning signals to strengthen risk management Implements strong post-sanction monitoring and collection practices Information Security Risk Risk Vision • Risk Appetite statement implemented as a strategic lever which has a strong linkage to functions with well defined thresholds and robust governance mechanisms.
— Expected Outcome
50 Capital and Liquidity risk ALM: Stringent Internal Threshold Liquidity: LCR maintained at 1.61x-1.78x of RBI mandate Time Bucket RBI thresholds ICF Internal thresholds LCR Q4FY25 – Q4FY26 0-7 days 8-14 days 15 days - 1 month -10% -10% -20% -10% -10% -10% • • No cumulative negative mismatch across time buckets No any breach in internal thresholds demonstrating strong adherence to regulatory compliance with sufficient liquidity.
— Expected Outcome
A zero-tolerance stance is maintained against any form of non-compliance A robust Code of Conduct is enforced uniformly for employees, DSAs/DMAs, and collection agents 52 Regulatory & Compliance Risk (2/2) Governance Further Strengthened By Robust Compliance Mechanisms • Annual Review and approval of all key policies by the Board Policies & Procedures Corporate Governance • Strong oversight by the Board and Management level Committees focusing on internal controls and regulatory Compliance.
— Expected Outcome
Compliance Monitoring And Testing • Compliance monitoring and reporting through fully automated Compliance Tool, periodic Compliance Risk Assessment and Compliance Testing.
— Compliance
o He brings over 31 years of global financial leadership across MSME, Corporate, and FIG Lending, Structured Finance, Debt Capital Markets, Treasury, FX and Interest Rate Derivatives, Risk Management, and Banking Operations.
— Executes the risk strategy through
Nitin Ramesh Gyanchandani Chief Risk Officer 3 21 o He is a qualified Chartered Accountant and has over 21 years of experience in the Banking and Financial Services and has a rich experience in managing Corporate Banking and Credit Underwriting & analysis.
— Executes the risk strategy through
o He has worked across Risk Management, Credit Underwriting & Analysis, Healthcare, and Auto.
— Executes the risk strategy through
Kashinath Palekar Head- Internal Audit 4 21 o Kashinath has over 20 years of experience in internal audit, controls, risk, and finance transformation, has led internal audit functions and worked with audit committees and management teams on risk and control frameworks, and has previously worked at Credit Suisse, Manipal Cigna Health Insurance, Deloitte, and IndusInd Bank Mr.
— Executes the risk strategy through
Speaking time
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Opening remarks
Direct Sourcing
FY25 28% Loan Portfolio 8,056 crs AUM FY25 7,963 crs 79.0% Prime Customer Segment (CIBIL Score >725) FY25 70.0% 1.05% Non-starter FY25 3.29% 2.24% Early Delinquency FY25 5.22% Asset Quality 4.8% Gross Stage 3 FY25 4.5% 2.1% Net Stage 3 FY25 2.4% 57.4% Stage 3 - PCR FY25 46.7% 5.3% ECL Provision on Total Loan Assets FY25 3.3% 10 FY26 Performance Highlights (2/2) Liquidity profile Available Liquidity: 599 crs Undrawn limit: 165 crs Treasury Asset: 434 crs 36.1% Capital Adequacy Ratio FY25 28.5% 10.4% Cost of borrowings FY25 10.9% 9.0% Incremental Cost of borrowings FY25 10.0% Profitability 16.9% Yield on loan assets FY25 16.5% 7.8% NIM FY25 5.6% 130.2 crs PAT FY25 52.6 crs 1.3% RoAA FY25 0.6% 11 Q4FY26 Performance Highlights 8,056 crs AUM Q4FY25 7,963 crs | Q3FY26 7,692 crs 1,306 crs Disbursement Q4FY25 1,081 crs | Q3FY26 1,117 crs 7,500 crs Vehicle Finance AUM Q4FY25 7,401 crs | Q3FY26 7,155 crs 175 crs Micro LAP AUM Q4FY25 52 crs | Q3FY26 128 crs 4.8% Gross Stage 3 Q4FY25 4.5% | Q3FY26
Business Value
✓ Prioritized collection effort ✓ Focus on high-risk accounts ✓ Improved intervention timing Analytics-led risk prioritization replacing uniform treatment strategies Bureau Intelligence & Early Warning Always-on Customer Risk Monitoring o Daily Bureau Trigger ingestion o On-us and Off-us payment monitoring o New external loan & liquid loan detection o Address & phone updates for skip tracing
Early Warning Signals
✓ Risk deterioration alerts & pre-delinquency feed Proactive risk detection and stress management Data Science Impact Snapshot 44% STP Enabled for Car & SCV as of April’26 15% Bounce Reduction in last quarter 70% Scorecard Coverage by March’27 Data Science Driven Sourcing & Decisioning Automated Underwriting & Risk Decisioning o Scorecard-led underwriting for CV and Car implemented o Risk-based pricing implemented o Enabled Faster TAT attracting better quality customers Balancing growth with portfolio quality Next Generation Intelligence Pipeline Under Development o Settlement Model o Fraud Trigger Framework o Lead Scoring Engine o Bureau-led Lead Conversion Models
Expected Outcome
✓ Higher conversion, fraud prevention, better sourcing Expanding data driven decisions across the lending value chain Strategic Vision | Creating a unified data driven ecosystem enabling smarter acquisition, stronger portfolio quality, proactive collections, and scalable growth Acquire Underwrite Monitor Predict Collect 45 Overall Technology Spread - Software Frameworks & Tools Interaction Layer Loan Origination CRM Indo Mitra Mobile App Partner Integration Vendor On-boarding Data Storage & Service Layer Data Repository Loan Management Collections, V-repo Incentive Management Accounting & GL Treasury Business Intelligence & MIS Business Intelligence Data Visualization 46 Holistic Digital Framework of LOS Transformation Sourcing Integration with Partners Real-time KYC validation through APIs OCR & OTP based validations Pre-approved loan offers Document collection Underwriting Third party validations Multi Bureau checks Online Vehicle Valuations Penny drop bank account verification Rule
Compliance
Foundation of every decision Training & Communication Anti-Bribery & Anti- Corruption (ABAC) • Implemented extensive ABAC Policy and established a structure of ABAC Program. Compliance Monitoring And Testing • Compliance monitoring and reporting through fully automated Compliance Tool, periodic Compliance Risk Assessment and Compliance Testing. • Periodic Trainings are imparted and communication mailers are circulated to all employees. • Fully automated stringent insider trading compliance system in place. Any transaction by insiders need prior compliance approval 53 Cyber risk: Information Security Risk Management Process to Prevent, Detect and Mitigate Risk Building Resilience Through People, Process, and Technology Dimension Focus Area Key Initiatives ➢ A competent and fully enabled security team that drives effective mitigation of cyber risks across the organization ➢ Regular employee training programs and engagements People Awareness & Accountability Process Governance & Response
Executes the risk strategy through
identification, assessment, and mitigation of risks. continuous monitoring, ensuring strong control environment. Well defined mechanism and review structure • • Risk assessment and monitoring conducted across businesses periodically Disciplined governance framework with Board oversight, defined committees to manage risk and maintain asset quality Name of committee Risk management committee Asset Liability committee Audit committee IT Strategy committee Key Risk reviewed Monitors overall enterprise risk like credit, market, operational and other risks Capital and Liquidation risk Oversees financial reporting, auditor recommendations, internal controls, and the whistle blower mechanism IT and cyber security risks and IT outsourcing risk Stakeholder’s relationship committee Reputational Risk 55 Ownership Structure and Management Team Experienced Management Team - IndoStar Randhir Singh Managing Director & Executive Vice Chairman 2 31 o He began his career at Citibank India in 1995 buildin